The Second Hallyu Wave (Part 2)

Alex Gershon
Namsan Tower at Night

Unleashing Repressed Creativity and Channeling Peer Pressure

The last blog post (which you can read here) tackled government involvement in developing the startup scene as well as the migration of younger Korean/Korean-Americans back to Korea.

In this post, I want to cover how the evolution of the Korean mindset as well as leveraging hyper-consumeristic peer pressure are two more factors that will catapult Seoul into the startup stratosphere alongside Silicon Valley.

Changing Times, Changing Minds

The Old, The Traditional, The Hackneyed

For the longest time, risk aversion and the “Samsung Mindset” have plagued Korea. The dream of every parent (“Samsung Mindset”) was for their child to attend SKY (Seoul National, Korea, or Yonsei University — seen as the three top non-engineering schools in Korea), get a comfortable job at Samsung, work until they forcibly retire at 55, and then open up a chicken and beer shop or drive a taxi.

Okay, that last two bits might not be a part of the dream but is it what happens in reality.

This dream was safe. It was a steady income. It was a way to start a family.

However, this “dream” kills innovation and stagnates the economy. Samsung, and similar large conglomerates (known as “chaebol”), are patient zero of what I have dubbed the “Chaebol Brain Drain.” With this, creativity is squashed as soon as someone joins the company as they realize what is important is to just follow their boss’s orders, show undying loyalty, and bide their time until they get promoted. A promotion that is, not based off of skill, but rather age and how closely you follow your boss’s orders.

At many Korean conglomerates, it is seen as anathema to leave work before your boss. This can lead to staying at the office past midnight just to save face.

Even before joining the company, creativity is under attack. Just to get an interview people have to pass a test which requires them to hide away from society for months just to study. Applicants lock themselves away memorizing answer after answer in half-rooms known as 고시원 (goshiwon). As you can tell by this and this, these aren’t rooms in which you would want to spend more than fifteen minutes — much less months.

And if you get the job, guess what?

More tests to get promoted. This consistent onslaught of tests rewires people away from innovation and more towards being able to study for the test and nothing more.

So what you have at these large companies is a system that is purely age-based, values loyalty over creativity, is heavily test-driven….oh and don’t forget those work hours where you are expected to join your colleagues after work for a night of heavy drinking that lasts until the early hours of the morning.

Talk about doing everything you possibly can to kill worker productivity

The New, The Hip, The Innovative

The startup provides an out, a new way to approach the workforce, and people are finally beginning to accept that maybe this path might be better than the Samsung mindset.

At a startup, your ability to contribute and push the company forwards far outshines your age or your alma mater. Moving a workforce, known for its hard work and dedication, from an environment that looks down upon creativity into one in which creativity is needed for survival has unearthed a potential that has laid dormant for far too long.

The sharing of ideas amongst co-workers and within the startup community is another variable that is helping drive the train of Korean innovation. In the past, you would receive your work orders from your boss and complete them without asking questions. Furthermore, you would not dare share ideas with people who worked at other chaebols.

Now, with people moving into the startup world, the lines of communication between boss and employee as well as amongst different companies is wide open. It is this type of creativity sharing and thought diffusion that has made Silicon Valley so great and will make Korea just as great.

Open co-working spaces like Maru180 are vital to the sharing of ideas amongst entrepreneurs.

Something else that often goes underreported is the growth of female empowerment in the startup world. A recent Economist article showed that the worst place in the OECD to be a working woman is Korea. This is not surprising when you see women at major companies overlooked for promotions again and again for a litany of reasons — all of which have zero factual basis.

While the startup scene still desperately needs more female CEOs and founders, it is miles ahead of any other type of employment in Korea. It has become an excellent platform for women to have their voice heard and share all of their ideas that have been bottled up due to the repressive nature of the chaebol.

The future growth of Korea is directly correlated to empowering the female voice and the Korean startup is tackling this better than anyone else

A Mea Culpa and Zealous Consumerism

So I had originally written about the concept of the struggle and how it ties to the Korean startup scene; however, after some conversations it appears my assumptions were slightly misplaced.

In lieu of this, I am going to discuss another topic that I’ve always wanted to explore which is how a consumer-obsessed society is being leveraged for startup growth.

Korea has a two-headed beast that shows itself anytime you walk outside. You can see it by the dearth of used cars and overabundance of top-notch luxury vehicles, you can see it in the thousands of dollars of hiking equipment draped over the mother who is just going for a brisk walk, and you see it with jobs and education.

What this is, is keeping up with the Kims. The desire to have what your friends have for fear of being left out or seen as lesser. While this is something that is present in many cultures, it stands out strongly in Korea. There is actually a phrase 엄친아 [omchinah] (엄마 친구 아들 or “Mother’s Friend’s Son”) describing how mothers always compare their sons to their friends’ sons — and never in a positive light for their son. Being someone who is a card-carrying member of the Jewish faith, I find this funny as there is a similar concept in Judaism.

엄친아 is so smooth and so cool!

What this pressure creates is a society in which you are always measuring your accomplishments and your possessions against anyone and everyone. When you walk outside, you are not competing with your friends over who has the newest phone but rather everyone around you.

50 million people live in a country that fits between Los Angeles and San Francisco with half that population being in an area smaller than NYC — and you are competing with all of them, in every facet of life

While there are obvious terrible negative externalities of this, what I want to look at is how this spurs innovation and adaptation. This pressure on having the nicest, newest piece of technology drives consumer demand and creates a market in which it is highly beneficial to be on the cutting edge of technological development so that you can be a large player in supplying this craze.

While one could argue that the demand for hardware is shored up by the likes of Samsung, what you also must look at is the high demand for software. What is a brand new phone worth if you’re not running the newest technology on it? Also, you better adapt to all new technology being released out of fear of being the only friend in your group who hasn’t tried the newest food delivery application or beauty app. In Korea, developers have a huge consumer market upon which to test and refine their product while substantially growing the user base in a short matter of time.

Looping back to the hardware discussion, while Samsung might be the largest phone maker in Korea, the space for new age hardware such as virtual reality headsets is wide open for the taking. There are dozens of companies looking to get into this space with many of them being ex-chaebol employees who are starting to see the opportunity in the startup world.

This demand is drawing people from all types of verticals into the startup ecosystem because there is a huge potential to make it big. Korea is primed for a startup explosion, all it needs is someone to light the fuse.

The era of the Korean startup is upon us and there is no stopping it now


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Enjoy this post? Absolutely hate it? Work for a chaebol and want to send me hate mail? Let me know by commenting below or emailing me.

Next week, in Part III, I discuss the dispersion of technology in Korea as well as the highly educated labor force.

You can read the first part in this series here.

Alex Gershon

Written by

Startups, Korea

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